Euronext plans bid for Stock Exchange

PAN-European stock exchange Euronext is planning to announce a bid next week for the London Stock Exchange (LSE), it has been reported.

The Paris-based borse has drawn up plans for a cash bid and intends to unveil them this week.

The move comes after the LSE rebuffed a £1.35 billion takeover approach from German rival Deutsche Borse last week on the grounds that the 530p-a-share offer undervalued both the company and potential savings from a tie-up with the Frankfurt-based exchange.

Euronext is reported to be planning a bid of at least as much as Deutsche Borse.

It claims the cost savings available to it from such a merger would be greater than those of its German rival because it already owns London's Liffe derivatives exchange and would be prepared to move its head office to London.

No-one from Euronext in Paris was today available to comment on the reports.

Jean-Francois Theodore, the chief executive of Euronext, is reported to have already held private talks with his opposite number at the LSE, Clara Furse, and has told her he will return with more detailed plans in the coming week.

Meanwhile, Deutsche Borse was reported to be planning to fight back with plans to offer senior posts on the board of the merged organisation to a high percentage of the LSE's management team, including Ms Furse and finance director Jonathan Howell. Chief executive Werner Seifert reportedly is due to meet Ms Furse again this week.

One report said Euronext is considering launching a rival stock market to the LSE in London if it does not succeed in a takeover bid.

A team from Euronext Paris reportedly has been at the Liffe offices next to Cannon Street station developing a trading platform for UK stocks and shares.

It has been holding talks with major securities firms to secure their support for the project, the Independent on Sunday reported.